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Germany bets on balanced budget

Germany plans a 31 billion euros spending rise by 2020 to cater for higher spending on a huge influx of migrants, but insists it can still stick to its cherished balanced budget. Ivor Bennett reports.

TRANSCRIPT +

Though their path is blocked for now, many of these migrants will eventually settle in Europe.
And, in particular, Germany.
The one million plus who arrived last year, expected to be joined by another 800,000 this year and 600,000 next.
The worry for the government there is how to pay for them.
(SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING:
"You're looking at housing, you're looking at integration, you're looking at language courses for example, billions and billions and billions of euros have been set aside for dealing with these people."
10 billion to be exact.
but that's not the only thing Germany's finance minister is having to cater for.
Security spending is also being increased - the flags at half mast outside the Chancellery a reminder of why.
In total, Wolfgang Schaeuble forecasts a spending increase of over 30 billion euros by 2020
Something he insists can be done without borrowing more.
(SOUNDBITE) (German) GERMAN FINANCE MINISTER, WOLFGANG SCHAEUBLE, SAYING:
"We will continue our policy of investing in infrastructure, education and research. By doing so, we ensure sustainable growth in Germany. We will achieve a budgetary equilibrium."
Balanced budgets are not common in Germany.
Last year's was their first in over 40 years.
But they're fast becoming significant.
(SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING:
"It has become very very popular within Germany, within the electorate. And you'd have to say for a government that's leaking popularity like a sieve, if it's able to pull that back via a balanced budget, then that's probably something they're looking to do."
Low unemployment does give them some wiggle-room.
The government hoping the higher tax revenues will fund the extra spending.

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